On Tuesday, the Securities and Exchange Commission (SEC) granted corporate executives permission to publish company news and announcements through social media.
However, the SEC stipulated that before executives can start posting corporate announcements on Facebook (NASDAQ:FB) pages or start shooting out Tweets, they must first advise investors as to which social media channels will be used to transmit information, ZDNet notes.
The SEC’s clarification on social media use came after Netflix (NASDAQ:NFLX) CEO Reed Hastings posted certain company data on Facebook. The SEC investigated, but declined to file charges.
Under the new decision, information released via social media platforms falls under the same rules as investor relations websites, which must comply with the Fair Disclosure regulation. The FD regulation mandates that information can only be distributed by means that all investors can access.
An SEC official said that social media channels were “perfectly suitable” ways to share information with stakeholders, but only so long as all investors were aware of their use.